Unlock More
About the series
The current business landscape presents interrelated challenges that are global in scope and highly disruptive. Future-seeking leaders are taking action to accelerate growth and sustainability while reducing risk through four connected c-suite roles: Chief Risk Officer (CRO), Chief Human Resources Officer (CHRO), Chief Diversity Officer (CDO), and Chief Sustainability Officer (CSO).
While these roles are not new, the global crises of 2020 and 2021 heightened the importance of their missions and collaboration.
01
CROs have become more prevalent in c-suites and board rooms, and are responsible for identifying, analyzing and mitigating events that could threaten the company. Common risk categorifies include strategic, reputational, operational, financial, technology/cyber, people, and political/regulatory. According to a Bloomberg analysis, there are approximately 2,000 CROs in the U.S. Deloitte reported that 47% of surveyed companies have a CRO, and that 90% expect risk management to become more important to achieving strategic goals in the next five years. Effective CROs take a strategic business perspective to mitigate risk and drive resilience. They cover the three major phases of risk: Ready, React, and Recover, and encourage assessing risks over a multi-year time horizon rather than quarterly or annually. A Willis Towers Watson survey identifies nine key enterprise risk management (ERM) activities that more than 90% of CROs report performing. In this effort, CROs routinely partner with other executives, including Chief Financial Officers (CFOs), Chief Operating Officers (COOs), Chief Technology Officers (CTOs), CHROs, CDOs and CSOs.
02
The CHRO role has changed materially in recent years, with now near ubiquitous presence in the c-suite and board room. Today, CHROs (or Chief People Officers/CPOs) guide a broader people-related performance and risk management portfolio that increasingly includes key elements of the employee experience and new ways of working (such as wellbeing, communication, facilities and technology), diversity, equity, and inclusion (DEI), organization strategy and sustainability. Increasingly, CHROs also wear Chief Administrative Officer or other hats. The focus of the CHRO has evolved from tactics and tools to strategic vision and, in some cases, transformation. According to Scott Sherman, Ingram Micro’s top HR leader, “We went from being people experts with enough business knowledge to survive to business experts with a deep understanding of people issues. That doesn’t mean you can just airdrop any executive into a top HR role. To be effective, we also need a mindset and deep grounding in the technical HR disciplines as well as strategy.” Today, CHROs routinely advise CEOs and boards on complex future-focused business issues that impact growth and financial sustainability in partnership with COOs, CROs, CDOs, and CSOs.
03
The CDO role has grown rapidly in prevalence over the past five years. According to Russell Reynolds, over half of S&P 500 companies have a CDO. This figure includes a sharp uptick in CDO appointments during the summer of 2020, a time when companies increased their emphasis on DEI commitments and actions. The responsibilities of CDOs are multi-faceted and range from strategy-setting to risk mitigation to execution. Specifically, their duties to c-suites and boards involve: collecting workforce and representation data; sponsoring employee resources groups and networks; identifying areas that lack diversity, equity or inclusion; advising on the design and implementation of inclusive pay, benefits, and career programs; executing manager and employee diversity training; and representing the organization to the community and regulatory agencies. More broadly, CDOs address discrimination and exclusion in the workplace by overseeing initiatives that build workplace dignity and an inclusive organizational culture. Additionally, they increase the representation of diverse cohorts in the organization through recruiting, training, mentoring, sponsorship, promotion and overall engagement. CDOs typically collaborate with CHROs, CROs, CSOs and General Counsels.
04
The emerging CSO role is responsible for company policies, programs, processes and reporting that support the organization’s commitment to sustainability, requiring significant interface with the c-suite and board. Fortune 500 companies hired more CSOs in 2020 than in the previous three years combined. Demand for CSOs grew 228% over the last decade. While some CSOs are focused primarily on the environment, more current constructs take a holistic view of sustainability that includes people and governance. While closely related to ESG goals, the CSO’s remit is often broader, addressing business drivers that create value both by impacting performance as well as reducing potential costs and risks. By proactively managing sustainability risks, organizations can more successfully recover and navigate the disruptive challenges of the current environment. CROs generally work closely with CFOs, COOs, CROs, CHROs, and CDOs.
These future-focused roles are connected by their common objectives to mitigate risk and drive resilience throughout their organizations.
These future-focused roles are connected by their common objectives to mitigate risk and drive resilience throughout their organizations. As collaboration across the four roles strengthens, so does an organization’s ability to effectively manage current disruptions, reduce uncertainty and thrive in a post-pandemic future.
A version of this article originally appeared on Forbes.com on September 29, 2021.
